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Former NY power broker guilty in pension probe
By DAVID B. CARUSO,Associated Press Writer -
Wednesday, October 7
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NEW YORK – A political power broker and an investment executive who advised government officials in several states have pleaded guilty to securities fraud in connection with a "pay-to-play" scandal at New York's public pension fund.
Raymond Harding, the one-time head of New York's now-defunct Liberal Party, entered his guilty plea Tuesday in Manhattan. He had been accused in April of accepting more than $800,000 in kickbacks from investment companies doing business with the pension fund.
Prosecutors said aides to former state comptroller Alan Hevesi arranged for him to get the money as payback for a number of political favors.
Attorney General Andrew Cuomo also announced a guilty plea by Saul Meyer, co-founder of the Dallas investment advisory firm Aldus Equity.
Aldus had been hired by public pension funds in several states to help decide how to invest billions of dollars in retirement system money, but Cuomo said Meyer corrupted his role as a "gatekeeper" by allowing politics and patronage to infiltrate the business.
Among other things, prosecutors said Meyer arranged to have Aldus pay $300,000 in sham fees to one of Hevesi's political consultants so the firm could get a $175 million pension fund deal.
Cuomo said Meyer's guilty plea also covered "fraud in investment transactions relating to public pension funds in New Mexico."
In a statement, the attorney general's office said Meyer had admitted that on "numerous occasions" while Aldus was acting as an adviser to the New Mexico State Investment Council and the New Mexico Educational Retirement Board, he had steered investment contracts to certain people.
"Aldus recommended proposed investments that were pushed on him by politically connected individuals in New Mexico, knowing that these politically connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico," the statement said.
Cuomo declined to say who those politically connected people were and referred questions to federal prosecutors, who he said were conducting a parallel inquiry.
Cuomo said Meyer believed that if he didn't approve the deals that were being pushed on him for political reasons, Aldus would lose its own lucrative contract to advise the two funds.
Meyer entered his guilty plea Friday, but the proceeding remained under seal until Tuesday.
Lawyers for Meyer and Harding did not immediately return phone messages. They had previously insisted that their clients were innocent of any crime.
Both have now agreed to cooperate with the investigation, Cuomo said.
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